Gold, silver, pgms, mining and geopolitical comment and news

On Thursday New York closed at $1,124.30 up $0.20. The dollar was stronger at $1.1246 at the close up from $1.1335, against the euro, with the dollar Index stronger at 95.76 up from 95.19 yesterday. This morning the LBMA gold price was set at $1,125.50 down $3.00. The euro equivalent was €997.61 down €1.42. Ahead of New York’s opening, gold was trading at $1,127.55 and in the euro at €998.51.

The silver price closed at $14.45 up 27 cents over Thursday’s close in New York. Ahead of New York’s opening today it was trading at $14.45.

Price Drivers

The financial markets across the world are recovering this morning. We are fully aware that valuations remain higher than they should be in developed world markets and the elements that caused the volatility and sudden falls, remain in position. This implies that we have not seen the end of such volatility and perhaps we could see worse in the future. The volatility of this week has damaged confidence in financial markets and this will be remembered for some time. Markets have not reacted in a ‘reasoned way’ but essentially were the victims of traders driving prices down setting off panic across the world. They are not efficient markets anymore!

What was most disturbing was the weakness of the dollar, then its recovery. Such market volatility is not expected in the world’s most important currencies. The three fingers pointing back from the finger pointing at China’s devaluation highlight that the dollar and euro swung much more in the last week than has the Chinese Yuan. The brutality of these moves makes a mockery of buying and selling of items priced in these currencies.

It would now be reasonable to title these times as ‘extreme’.

As September approaches we see European holidays coming to an end. The Europeans tend to go on holiday at the same time, for the entire month of August. In India, it is close to harvest time and the reaping of profits from a reasonable Monsoon. With eyes on the festive season on both sides of the world, we are close to the beginning of the ‘gold season’ now.

There were purchases of 1.49 tonnes into the SPDR gold ETF but none into the Gold Trust yesterday. This leaves the holdings of the SPDR gold ETF at 682.595 tonnes and 162.07 tonnes in the Gold Trust